SAPPI LTD (SAP) 6-K

In addition, the Transaction adds to Sappi’s product range a number of well-known brands which complement Sappi’s existing products and provide access to
an enlarged customer base. Furthermore, the integration of the Acquired Business with the existing Sappi operations is expected to strengthen the profitability
of Sappi's European operations through increased coated graphic paper production, benefiting from the economies of scale and the ability to optimise capacity
utilisation. Other expected annual synergies coming from distribution, the integration of sales and administration, and the rationalisation of manufacturing
across the Sappi Group are anticipated to further enhance the performance of Sappi’s European business.
Sappi estimates total annual synergies of approximately Euro 120 million from the Transaction which should be realisable in full within three years and
without material capital investments. This estimate of synergies Sappi expects to achieve following the Transaction is based on assumptions which in the
view of Sappi’s management were prepared on a reasonable basis, reflect the best currently available estimates and judgments, and present, to the best of
Sappi’s management’s knowledge and belief, the expected course of action and the expected future financial impact on performance of Sappi due to the
Transaction. However, the assumptions about these expected synergies are inherently uncertain and, though considered reasonable by management as of the
date of preparation, are subject to a wide variety of significant business, economic, and competitive risks and uncertainties that could cause actual results to
differ materially from those contained in this estimate of synergies. There can be no assurance that Sappi will be able to successfully implement the strategic
or operational initiatives that are intended, or realize the estimated synergies.
This synergy estimate is not a profit forecast or a profit estimate and should not be treated as such nor relied on by shareholders or prospective investors to
calculate the likely level of profits or losses for Sappi for the financial year ended 30 September 2008 or beyond. This synergy estimate has not been included
in the pro forma financial effects referred to in Section 12 below. The reporting of the synergy estimate complies with the accounting policies of Sappi.
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